
Tradeoffs as a Universal Law
Every choice sacrifices alternatives. Speed vs accuracy, cost vs quality, flexibility vs efficiency, growth vs stability. No perfect solution exists.
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Every choice sacrifices alternatives. Speed vs accuracy, cost vs quality, flexibility vs efficiency, growth vs stability. No perfect solution exists.

Diminishing returns means more input yields less output over time. Supply and demand set prices.

Theory of Constraints: Identify the bottleneck limiting system performance. Optimizing non-constraints wastes effort without improving throughput.

Cognitive principles shaping decisions: bounded rationality from limited mental capacity, cognitive load that drains energy, and availability bias.

Rules fail when context changes, complexity increases beyond anticipation, or people game them by optimizing the rule instead of the intended goal.

First-order effects are immediate and obvious. Second-order effects are what happens next — often larger and opposite.

Pareto principle: 80% of effects come from 20% of causes. Leverage finds high-impact points.

Rules tell you what to do; principles tell you how to think. Principles transfer across contexts while rules remain situation-specific.

Tactics work until conditions change. Principles adapt because they're based on underlying truths, not surface patterns.

Laws break when context changes because they're context-dependent. Diversification reduces risk in stable markets but fails in correlated crises.

In 1914 the British Admiralty employed 2,000 officials to administer 62 ships. By 1928, the fleet had shrunk to 20 ships — but the Admiralty had...

Alfred Korzybski's principle: every model is an abstraction that omits, simplifies, and distorts. Long-Term Capital Management.